2 O.C. Resort Hotels Sold at Cut-Rate Price : Real estate: The Hyatt Newporter and Dana Point Resort are being unloaded in a market that analysts say has bottomed out.

Two landmark Orange County resort hotels, one on the market for nearly four years, are about to change hands.

The federal Resolution Trust Corp. sold the sprawling 410-room Hyatt Newporter hotel recently in a $7.1-million sale to WestCoast Hotels, a Seattle hotel company, brokers said.

And the 350-room Dana Point Resort is in escrow with Cigna Investments Inc. of Philadelphia for about $40 million, less than half of the $106 million that Japanese investors paid for the hotel in 1989, brokers said.

“I think this market has hit the bottom and buyers know it,” said Donald Wise, a vice president with the hotel division at CB Commercial Real Estate Group in Anaheim, who was confident the Dana Point sale would be final in about two weeks.

“The problem is that we are just languishing. And this bankruptcy is another wild card. We don’t know how it will impact tourism,” he said.

The first major resort hotel built in Newport Beach, the Hyatt Newporter was taken over by the RTC after its owner, Beverly Hills-based Columbia Savings & Loan, was seized in 1991. Columbia paid $26 million for the 33-year-old hotel and 26-acre site in 1985.

The Newporter’s newest owners, a Seattle company that owns and manages about 23 hotels, including the 290-room Benson Hotel in Portland, plan to continue renovating the Newporter, said Matthew Murphy, a vice president of sales with WestCoast Hotels.

“It was a good deal. We thought it was undervalued,” said Murphy of the sale late last month. “We looked at Newport Beach as the nicest part of Southern California. It’s a very attractive area. And we look forward to working with Hyatt.”

The Dana Point Resort is being sold by Tokyo Masuiwaya Corp.), a Japanese firm that bought the hotel at the height of the market thinking that hotel values would continue to grow, brokers said. Cigna officials and representatives for Dana Point declined to comment on the impending sale.

In the 1980s, when California property was a hot commodity, Japanese investors were among the most aggressive buyers, paying premium prices for gleaming office towers and glittering resorts across the state.

The real estate slump of the 1990s brought a quick reversal, with many of those same investors scrambling to unload commercial properties as values plummeted.

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Since the 1980s, Japanese investors such as Tokyo Masuiwaya have attempted to untangle themselves from commercial property throughout California, where about one-third of Japan’s U.S. holdings are located.

The impending Dana Point sale will be one of the first major sales of a Japanese asset in Orange County. Almost no major Orange County properties, which include Taco Bell Corp.’s headquarters in Irvine, have been sold off.

“I think the hotel market in Orange County has turned around,” said Michael Meyers, a partner with Kenneth Leventhal & Co., the accounting firm.

“So the Japanese may see this as an opportunity to sell and recover some of the their investment.”

In 1993, Japanese investors put only $705 million into U.S. real estate--just 4% of the $16.4 billion they invested at the peak of their property purchasing in 1988, when major Orange County properties were bought, according to a study released in April by accounting firm Kenneth Leventhal & Co.

During recent years in Orange County, Japanese investment dropped even more dramatically, falling from about $600 million in 1990 to virtually nothing in 1993, the firm said.

“Except for cries of anguish, the Japanese have not been heard from in Orange County for the past three years,” said Ken Agid, a longtime real estate consultant in Newport Beach.

Orange County has seen several Japanese-owned properties run into trouble. In 1993, the Waterfront Hilton in Huntington Beach filed for bankruptcy protection after defaulting on its $57.7-million construction loan when the Los Angeles branch of Dai-Ichi Kangyo Bank moved to foreclose.